For our Top CEOs in Franchising feature in the November/December issue, we identified notable leaders who are guiding their brands through periods of growth, change and, of course, challenges.
Duck Donuts CEO Betsy Hamm says the treat brand is getting more creative with its menu to attract customers, introducing items such as a donut ice cream sandwich and new beverages.
Eight years, 141 new stores, a pandemic, new private equity ownership, supply chain and labor challenges, and changing consumer demands.
Throw in a promotion from chief operating officer to CEO and that’s a snapshot of Betsy Hamm’s tenure with Duck Donuts. The full story, of course, is much more nuanced, but Hamm summed it up in three words: “It’s been wild.”
“I think it’s been crazy for everyone, of course, but I think it’s been especially crazy for any brand who was young and small like we are, or were. That emerging brand where we didn’t have everything figured out,” said Hamm. “We thought we had a roadmap or a game plan, and then things get thrown at you. Then you kind of have to change course.”
Hamm, who took over as CEO in April 2021 following NewSpring Capital’s purchase of Duck Donuts from founder Russ DiGilio, said for her, leading through so much change has necessitated an emphasis on discipline.
“These are our goals. These are our strategies. These are what we’re trying to hit. And here’s the initiatives that are going to support it,” said Hamm of her approach. “And it’s hard, right? Because you can easily get distracted by putting out fires or something that’s new and bright and shiny. So, it’s really important to stay disciplined and have a really strong leadership team.”
Notable additions to that team in recent years include Gary Hitterdal, who as vice president of development helped not just sign new Duck Donuts franchisees but efficiently get shops open. Also impactful, noted Hamm, is VP of Operations Nick Raucci and Senior Director of Marketing Lindsay Dunn, the latter of whom is driving key adjustments and improvements in how Duck Donuts is marketing itself and communicating with guests.
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Hamm, who started with Duck Donuts when it had 22 units—it now has 147 stores in the United States and 16 internationally—drew early in her tenure on a 15-year career with Hershey Entertainment & Resorts as she tackled everything from developing a cohesive brand identity to rebuilding the brand’s website and social media presence.
Messaging today focuses heavily on driving frequency. “As much as we would love for people to eat donuts every week, it doesn’t quite happen, so giving them reasons to come back,” she said.
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A more robust limited-time offer calendar brought the introduction of a cotton candy donut and a vanilla caramel donut topped with Twix. Menu innovation emphasizes topping combinations and products already in a store’s inventory. Case in point: the donut ice cream sandwich.
“We obviously have donuts; we have ice cream,” said Hamm as she noted the importance of monitoring cost of goods. “It’s trying to utilize what we already have and maybe just repackaging or repositioning it.”
In addition to donuts, which the brand positions as a treat or snack for any time of day, the menu also includes several breakfast sandwiches, plus coffee and espresso drinks. Sales are fairly even across different dayparts, 85 percent of them coming from donuts. Duck Donuts did systemwide sales of $67 million in 2023, up 10.4 percent.
With its products and its marketing, Duck Donuts is likewise working to appeal to the Gen Z demographic. Customer segmentation research showed it was strong among its core millennial demographic and among moms and families, “but we were missing that young demographic,” said Hamm. “So let’s be way more intentional of trying to engage with them.”
Duck Donuts made its TikTok debut last summer and is emphasizing its Instagram presence. It launched its version of a refresher—those flavored iced beverages largely popularized by Starbucks—to remain relevant in the drink category.
“Just knowing that people aren’t out and about spending money as freely, maybe, as they were last year, you definitely have to get a lot more creative on how you get share of wallet,” she said.
With technology upgrades and better utilization of its digital menu boards, tweaks to the in-store experience helped streamline the ordering process. For a concept with a strong build-your-own donut component, customers could become paralyzed by choice. The antidote? Highlight recommended topping combinations and seasonal flavors, and provide assortment guides at the point of purchase to boost throughput.
Improvements to the online ordering process, meanwhile, are underway and will culminate with a fresh website late this year or early next featuring a new overlay from digital ordering platform Olo and integration of Olo’s catering software.
“Building your own donuts is difficult online, and it’s a little clunky and it’s a lot of clicks, and the packages weren’t very clear,” said Hamm as she noted on the catering front there is immense opportunity to grow sales but the interface must make it simple.
“Let’s remove all the barriers for the guest and give them that experience where they can order donuts faster, and hopefully we can take that opportunity to also upsell, too,” she said.
Cognizant of competition in the treat space—Duck Donuts isn’t only up against fellow donut brands but also “the cookies, the Bundt cakes, the sticky buns, the milkshakes”—Hamm returned to the discipline that guides her. “It’s meeting customers where their demands are.”